The bearish short-term probability we discussed yesterday played out overnight, as gold fell while the US dollar index caught a bid coming out of oversold conditions (from within its uptrend channel). The DXY looks ready to make a move up to retest the upper range of the channel, which would likely continue to pressure metals in the short term.
It stands to reason that major U.S. indices would also be subject to pressure as the DXY moves up in the short term. The S&P 500 is approaching the congestion area discussed in prior weeks, which could now be overhead resistance.
Whether the USD is in the process of topping out in the medium to long term remains to be seen, as the major overhead resistance level around 104/5 for the DXY remains intact.
Thanks and have a great day,
